he rampant practice of online gambling in Indonesia has resulted in significant financial losses, an increase in gambling-related crime and major data breaches. Millions are involved, many relying on fintech loans to support their gambling habits, complicating their ability to repay.
This escalating crisis carries profound social and economic repercussions, highlighting the urgent need for stronger preventive measures and enforcement to address online gambling and its financial fallout. Fintech lenders play a pivotal role in this fight, to manage and curb gambling addiction while ensuring responsible lending practices.
Gambling is a criminal offense with severe penalties here. Under Article 426 of Law No. 1/2023 on the Criminal Code, offering or facilitating unauthorized gambling can result in up to nine years in prison or a fine of Rp 2 billion (US$ 131,560). This applies to anyone involved in gambling operations, regardless of any usage conditions.
Article 427 states that participants in unauthorized gambling may face up to three years in prison or fines of up to Rp 50 million. Additionally, Article 45(3) of Law No. 1/2024 on information and electronic transactions imposes penalties of up to 10 years in prison and/or fines of up to Rp 10 billion for the unlawful distribution of gambling-related electronic content.
Despite stringent regulations, the Financial Transaction Reports and Analysis Center (PPATK) reports a staggering 4 million online gamblers in Indonesia as of July 2024. Alarmingly, 80,000 of these gamblers were children under 10, while 440,000 are adolescents and young adults aged 10 to 20. The largest demographic, 1.64 million, falls between 30 and 50 years old, with an additional 1.35 million over 50.
From 2017 to 2023, the total turnover of online gambling transactions in Indonesia reached Rp 517 trillion. In the first quarter of 2024 alone, online gambling transactions hit Rp 100 trillion, underscoring the growing scale of the crisis in the country, according to katadata.co.id
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The Financial Services Authority (OJK) is steadfast in its commitment to combating online gambling. As of August, the OJK has directed banks to block over 6,000 accounts linked to online gambling transactions.